A vital mechanism that gives form and pattern to the vertebrate embryo is embryonic induction, the process by which one cell influences the differentiation and/or behavior of another. In vertebrates, a complex network of peptide growth factors has been shown to induce and pattern the differentiation of mesoderm. The studies proposed here will address two general questions: first, how signals mediated by peptide growth factors are integrated to produce the ordered differentiation of mesoderm in the mouse embryo, and second, the role played by molecules that regulate phosphorylation-dependent signal transduction pathways during mesoderm induction in the mouse. To provide a framework for these studies, a hierarchical model of growth factor signaling during mesoderm induction and patterning in the mouse is proposed. The nodal gene encodes a transforming growth factor-beta- related protein, and because nodal mutants generate neither a primitive streak nor mesoderm before dying in utero, this gene occupies an initial position in my model of the signaling required for mouse mesoderm induction. The first specific aim of this project will be to test the hypothesis that the Nodal protein signals an epithelial-mesenchymal transition in mouse epiblast, such as the one that forms the primitive streak in wild type embryos, and that Nodal signaling is required for downstream events that pattern mesoderm. Peptide growth factors bind to receptors on nearby cells that exhibit tyrosine kinase or serine/threonine kinase activity. This activity initiates a cascade of intracellular phosphorylation events which lead to changes in gene expression. A class of molecules that have been shown to modulate signal transduction pathways are the protein tyrosine phosphatases (PTPases). The second specific aim of this project will be to test the hypothesis that PTPases regulate mesoderm induction in the mouse embryo. My laboratory has cloned three novel PTPases which are differentially expressed during mouse development. I propose perform genetic manipulations to determine whether the activity of these PTPases influences pathways of mesoderm induction and patterning.